Mining sector surge helps lift FTSE to 22-month high

The London market rose more than one per cent on Thursday to hit a 22-month high as investors embarked on the Easter holidays buoyed by recovery hopes.

Miners were the pick of the risers as a weak dollar and positive

economic news helped the sector.

The FTSE 100 Index rose 65.25 points to close at 5744.89 in the wake of strong trading on Wall Street after upbeat survey data showing the best performance for Unityed States manufacturers since 2004. The Dow Jones Industrial Average rose 0.7 per cent in early trade.

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This also followed a UK survey showing the fastest pace of growth from the sector in 16 years.

In currency news, the pound rose to above 1.12 against the euro while it also climbed to 1.52 against the dollar.

The weakening of the dollar and recovery hopes pushed up the cost of base metals such as copper and nickel, boosting commodity stocks. Xstrata was the strongest performer in the mining sector, with shares up 511/2p to 1300p or four per cent.

In the meantime, oil prices extended a two-month rally to head above $84 a barrel, helping oil and gas services firm Petrofac and prospector Cairn Energy lead blue-chips higher. The duo rose 84p to 1286p and 161/2p to 4331/2p respectively.

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Meanwhile, Vodafone was one of only a handful of firms on the back foot amid plans to cut mobile phone charges.

Regulator Ofcom's ruling sparked worries over the impact on Vodafone's profits and shares initially slipped one per cent, although they recovered later in the day to end 0.3 per cent down or 0.3p lower to stand at 151.7p.

Aside from Vodafone, the few top flight stocks in the red were in defensive sectors as investors' appetite for risk increased.

Drugs firms Shire and GlaxoSmithKline fell 6p to 1448p and 81/2p to 1257p respectively, while Embassy maker Imperial Tobacco eased 6p to 2004p.

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BSkyB, which was also the subject of a ruling by Ofcom on Wednesday, continued to rally after investors expressed relief that the regulator did not go further in its determination on wholesale prices for sports content. Shares were up another 101/2p to 6121/2p.

In the FTSE 250, babycare retailer Mothercare was a major casualty, losing 101/2p to 590p or two per cent after reporting its first drop in UK like-for-like sales for 19 quarters. Comparative sales slid 1.6 per cent in the 11 weeks to March 27.

The company now has 728 outlets outside the UK after opening 119 stores in 29 countries during the year, including in Australia for the first time. There are 387 UK stores.

Investec Securities said the stock still offered an attractive investment case.

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Analyst Katharine Wynne added: "Mothercare is still more defensive than most UK retailers, with a combination of product mix and portfolio restructuring to support the UK outlook, allied with a growing international business."

Asset management house Gartmore remained in the spotlight following Tuesday's shock news of the suspension of one of its star fund managers which saw shares plunge 31 per cent.

The stock continued its fightback on Thursday after Wednesday's eight per cent bounce-back, adding a further 16p to 141p or 13 per cent.

Spread betting firm IG Group also gained 14.1p to 416.3p following regulatory changes which should help its US business.

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Meanwhile, Ryanair added eight per cent after it said that a surge of bookings in the past month at higher prices had added a further 25m euros (22m) to profit expectations.

The four biggest Footsie risers were Petrofac up 84p at 1286p, Xstrata ahead 511/2p at 1300p, Randgold Resources up 205p at 5220p and Cairn Energy ahead 161/2p at 4331/2p.